Alitalia: journey to excellence

Rome, 18 May 2016 – Alitalia has delivered strong progress in the 18 months since the launch of a major industrial plan to re-engineer the airline to compete effectively on the global aviation stage.

The
new Alitalia began operations on January 1, 2015 following a €1.76 billion
recapitalisation that saw historic debt wiped out and a €560 million investment
by Etihad Airways for a 49 per cent equity stake. The majority 51 per cent
stake is held by Italian CAI.

A
comprehensive three-year programme to rebuild the business and revitalise
products and services in order to return it to profitability has seen, so far,
the launch of new intercontinental, international and domestic routes; the
introduction of new aircraft with new interiors; new airline partnerships and
improved flight connections at Rome’s Fiumicino airport, plus a greater focus
on customer service and improved products for air travellers in order to boost
quality.

Alitalia
unveiled contemporary new branding in 2015, and it today launched a new staff
uniform and revealed its first major advertising campaign for seven years.

Alitalia’s Chairman Luca Cordero di
Montezemolo was joined by James Hogan, Vice Chairman of Alitalia and President
and Chief Executive Officer of Etihad Aviation Group, and Cramer Ball, the
recently appointed Chief Executive Officer of Alitalia, for two days of events
in Rome and Milan. They briefed 2,500 Alitalia staff, members of the media and
major corporate clients and travel agents on the latest developments in the
business.

Mr Montezemolo said: “Positive and meaningful change continues at pace in every area of the
business. Alitalia has a strong new commercial focus and greater emphasis than
ever before on delivering signature Italian hospitality.

“Everything
we are achieving is a result of the dedication and commitment of the people of
Alitalia and I publicly salute their incredible effort and hard work.

“We
are creating a bright future by delivering the transformation that we promised.
Alitalia today is a modern, leaner and energised business. We are reducing
losses and will be profitable by 2017 if we remain totally focused.”

Alitalia’s recently released financial results
for 2015 show that losses reduced by €381 million in 2015, in line with targets
set in the industrial plan. Alitalia’s market share to and from Italy also grew
to more than 30 per cent in 2015, up four per cent in 2014.

A factor in Alitalia’s new success has been
the strength of its partnerships with Etihad Airways and participation in
Etihad Airways Partners alongside Etihad Airways, airberlin, Air Serbia, Air
Seychelles, Etihad Regional operated by Darwin Airline, Jet Airways and NIKI.
The brand brings together partner airlines to offer customers more choice
through improved networks and schedules and enhanced frequent flyer benefits.

More than 470,000 passengers since January 1,
2015 have been shared between Alitalia and Etihad Airways and more than 1.2
million passengers have been shared between Alitalia and Etihad Airways
Partners airlines.

In addition, joint negotiation and procurement
has saved Alitalia more than €13.5 million since January 1, 2015.

Alitalia codeshares with Etihad Airways,
airberlin, Air Serbia, Jet Airways, Air Seychelles and Etihad Regional and
provides ground handling in Rome for Etihad Airways, Air Serbia and airberlin.
In addition, it manages the operations control centre for Etihad Regional.

Alitalia recently announced a strengthening of
its commercial relationship with airberlin with a 25 per cent increase in
weekly frequencies on non-stop flights from Italy. It will codeshare with
airberlin on more than 1,400 flights per week on 91 routes, including 56
non-stop services and 750 weekly flights between Italy, Germany, Austria and
Switzerland.

Alitalia Vice Chairman James Hogan said: “Few airlines have undergone such radical
change as the new Alitalia and it is now reaping the benefits of a robust new
strategy built around dynamic and effective partnerships. After some difficult
and challenging years, Alitalia has a great story to tell. We promised to
create a world-class airline.

“We
are delivering on that promise and Alitalia today is as good as any airline in
Europe. We are only half-way through a three-year journey to deliver
profitability. The airline is already unrecognisable from its predecessor.
Customers are winning through greater choice and better products and services.

“Alitalia’s
people are winning through a growing company that offers new career
opportunities. Italy is winning as we build an airline Italians can be proud to
fly and call their own. Alitalia is building a competitive and sustainably
profitable future that will deliver financial stability and long-term growth.”

Alitalia Chief Executive Officer Cramer Ball
said: “Alitalia is regaining strength and
controlling its destiny, working hard with quality partners to drive revenue.
As our evolution continues, we will remain totally focused on putting our
customers at the heart of everything we do and deliver value through relevant
and impressive services and products.

“We
are also firmly focused on our goal to become profitable because profit will
enable further growth in the years ahead through reinvestment. That means
fighting harder on cutting costs, increasing revenue, and increasing
productivity by becoming more efficient.”

Alitalia will invest a further €400 million in
2016 across its fleet and cabins and in the areas of technology and
infrastructure.

New flights to world-class destinations will
start. Alitalia began flying to Santiago at the start of May with new flights
to Mexico City starting in June and flights to Beijing from July. Alitalia is
equally committed to increase its domestic flying programme, growing in
southern Italy, Sicily and Sardinia. The summer 2016 schedule will offer more
than 400 weekly frequencies connecting southern and northern Italy.

To support the customer experience, more than
6,000 cabin crew and airport staff have undertaken new specialised customer
service training. The emphasis on quality customer service has been further
reinforced by a new Transit Team at Alitalia’s Rome Fiumicino hub, a €25
million investment in ground support equipment, new faster boarding procedures,
and more staff on duty at airport gates.

Mr Ball added: “We are showing our customers that the new Alitalia stands for great
service, quality and that it represents the best this great country has to
offer. Our product, service and punctuality have changed to best-in-class and
we are passionate about providing the highest levels of service and quality. We
are the new smart choice in European air travel.”